Meet Jesse: He's ditched Bitcoin for bonds

And is now focused on generating passive income through a variety of investments.
Ally Selby

Livewire Markets

Unlike some of the readers we have profiled recently who mainly use a combination of low-cost ETFs to compound their savings, 27-year-old Jesse is a bit different. 

When he started out, Jesse's main game plan was to get rich quick, with little care for the consequences if it didn't go to plan. Then again, who didn't feel almost invincible when they were young? That's one of the novelties of youth. 

Back then, he invested in cryptocurrencies and meme stocks. Now, eight years later, having ridden the wild swings of these very investments on their way south, he's entirely focused on generating passive income. 

Today, nearly half of his portfolio is invested in bonds through Blossom - a micro-investing platform that launched in 2021 with the aim of democratising the fixed-income market. The rest is spread across income-focused ETFs, and more speculative investments from his early days in the market. 

Jesse has learnt plenty of hard lessons in that time - including that the FIRE movement is "BS" for those who don't earn more than six figures and that you can't time the market, as well as the importance of taking the emotion out of your investment process.

In this Meet the Investor profile, Jesse candidly shares the highs and lows of his investment journey so far, his hopes for generating between $50,000 and $60,000 in passive income from his portfolio in the future, as well as two of the worst investments from his eight years in markets. 

Livewire investor profile:

  • Name: Jesse
  • Age: 27
  • Employment status: Employed 
  • Years investing: 7-8 years 
  • Investment goals: Passive income
  • Products used: Cryptocurrencies, bonds, equities, ETFs, REITs, and BDCs
  • Biggest portfolio holding: Bonds
Source: Supplied 
Source: Supplied 

How old are you and how long have you been investing?

I am 27 and I started investing about seven or eight years ago.

What is your objective from investing? 

Starting out, it was to quickly make as much as possible. My care factor was zero. Now, I'm largely focused on more predictable gains and investing for income - but I still leave part (around 10%) of my investment inputs for more speculative assets.

What products do you use to execute your strategy? 

At the start, I invested in crypto and meme-stocks such as AMC (NASDAQ: AMC) and Gamestop (NASDAQ: GME), and select stocks that I thought would benefit over the long term - like artificial intelligence, Apple (NASDAQ: AAPL), Spotify (NASDAQ: SPOT), Tesla (NASDAQ: TSLA), and mining. 

I still hold these because I'm underwater on my positions and I'm okay to wait for another rally. But now my focus is on income - so covered-call exchange-traded funds (ETFs), real estate investment trusts (REITs), business development companies (BDCs), and bonds (only through Blossom) and still a small section into Bitcoin and Ether.

How would you describe your strategy?

Like many, I get stock tips online. I only trust those who provide reasoned analysis as to why particular tips are a buy. I do my own analysis on each - just a simple check of holdings, income, expenses, models and dividend yield and weigh up the risk versus reward.

My goal is income and compounding gains - so I do my own dividend reinvestment plans (DRIPs) with basically all my picks and with the bonds. They're long-term holds with appreciation being secondary, so price stability is a factor too.

Could you please share your top five holdings in percentage terms and tell me a bit about why you hold each of these positions?

1. Bonds through Blossom - 43% - I have a few holidays coming up and I need greater stability and liquidity. Most of the funds invested won't be there for longer than a year.

Then, based on current prices, not purchased price:

2. JPMorgan Equity Premium Income ETF (ASX: JEPI) - 7.5% - This makes up part of my income-based portfolio. 

3. Bitcoin - 5.5% - This is leftover from earlier heavy investing, I don't really buy it anymore. 

4. Tesla (NASDAQ: TSLA) - 4% - Again, leftover from early investing (one of the only ones I'm up on by about 50%). 

5. Spaceship's "Universe" portfolio - 3% - I'm down bad on this. 

These are just individual holdings - my "income" portfolio of various ETFs, REITs and Blossom-based bonds adds up to over 75% of its weight.

Could you tell me about your worst investment?

UST. It was an algo stablecoin pegged to USD that was yielding 20% p.a. on a DeFi protocol before it collapsed to basically zero last year. I lost a few hundred bucks. I'm also underwater on a handful of altcoins that I invested $100 each into.

In traditional markets, I'm down 80% on my Coinbase Holdings (NASDAQ: COIN) and over 90% on Virgin Galactic Holdings (NYSE: SPCE). Space and crypto are two massively speculative markets.

My worst investment overall (if you could call it one) was a used Holden Astra convertible I purchased for $1,800 and owned for a few days before my mechanic told me it was basically a write-off.

Jesse in Athens. (Source: Supplied)
Jesse in Athens. (Source: Supplied)

How does Livewire help with your investing process and what tips can you share with other investors about using Livewire?

I would tell investors to treat any source, including LW, the same - vet tips yourself and really try to talk yourself OUT of an investment rather than INTO one.

Don't be influenced. Question why someone made a tip, and what they gain from doing so. Your life and goals are different so find a contributor or series that aligns with your goals and ignore the rest.

Is there a lesson you’ve learnt as an investor that could potentially help others?

A single lesson is hard, so here are a few:

  • Unless you're on six figures and live somewhere dirt cheap - FIRE is absolute BS and you'll spend your best years being a tight-ass so just live your life and invest what you can.
  • You can't time the market.
  • Have a plan.
  • As soon as you buy something its price will drop so you better have conviction.
  • 99% of people are better off investing in a market-tracking ETF or just a high-interest savings account.
  • Take the emotion out of investing.
  • That stock/crypto that just went on a face-melting rally? Don't buy it - you'll be exit liquidity for those who got in early.
  • If you've made a huge paper gain on an investment that makes you feel sick - it's time to sell and never think about it again.
  • Pay attention to your non-investment "investments" that can just drain your wealth - cars, clothes, shoes, furniture - some people call this "buy once, cry once" or whatever.

Can you share a personal passion or ambition you have for your future?

Investing wise? I would love to eventually buy a flat or house and not have to rent anymore which is fast becoming, if not already, out of reach for many my age.

Otherwise, I just want to earn enough income from my investments so if I find myself out of work I'll be okay for a few months. I work in a turbulent industry at the best of times (news media) which is currently being heavily disrupted.

Eventually, I'd like my "income" portfolio to generate a decent wedge ($50-60k?) so I don't have to really worry about work anymore and can do passion projects.

On the personal ambition side - I want what almost everyone wants, really: To buy a house, get married, have kids, provide them as comfortable of a life as possible without working myself to death and see as much of the world as possible while I'm at it.

As for my passion, I like telling stories and I'm fortunate my job allows me to do that. 
Jesse in Paris. (Source: Supplied)
Jesse in Paris. (Source: Supplied)

Would you be interested in being profiled in our Meet the Investor series?

Meet the Investor is one of Livewire's most popular series, helping us draw on the insights of our incredibly knowledgeable readership.

We are looking for more readers to profile in 2023. If you would like to share your story too, please send us an email at:

content@livewiremarkets.com

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Ally Selby
Deputy Managing Editor
Livewire Markets

Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian...

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